By Roy F. Hrubes and Robert Lukes, Engineering Staff, Chicago

The corner of Wells and Van Buren Streets in Chicago’s "Loop" was quiet on Sunday, March 2, 1947. Normally, this area during the week would have been crowded with hundreds of people busily engaged in their workday pursuits. Around this corner clustered large office and mercantile buildings including the Insurance Exchange Building with Fireman’s Fund Western Department offices on the seventh and eighth floors, the Insurance Center Building, the Dixon Building and the Van Buren Building. These buildings, usually occupied by thousands of people, were largely empty and only a few passers-by and vehicles were on the streets.

That was the scene at 12:15p.m. A moment later the three-story brick building on the southwest corner disintegrated with an earth-shaking blast. As clouds of smoke billowed from the leveled building, glass cascaded to the streets from surrounding buildings. A street car, halted by the traffic light at the corner, was completely wrecked as its screaming, injured passengers struggled to get off. A shattered taxicab on Van Buren Street miraculously saved its occupants against all but glass cuts. Two persons, a man and wife, were killed when they were blown onto the elevated tracks from the sidewalk adjacent to the ill-fated building. Two other persons, the only people inside the building at the time of the explosion, were also killed.

The corner had the appearance of a bombed-out section of a city in a war zone. Debris filled the streets as firemen and police, Red Cross workers, and volunteers sought to care for the more than thirty injured persons. Dangling window casements and broken glass which fell at irregular intervals from the buildings endangered the rescue workers. Within an hour 600 policemen had roped off the area, which included several blocks, to prevent looting and further injury.

The Insurance Center Building, except for the demolished building, was the hardest hit. Every window had been broken and the interior of every floor damaged to a varying degree. Many windows in the Insurance Exchange Building, including a large number in our Group’s offices, were broken. The building just south of the structure which exploded was heavily damaged as its north wall, blown inward, caused a number of floors to collapse. Other buildings suffered varying degrees of damage, as windows were blown out as far as two blocks away.

Great as was the physical damage, the loss in human life and limb would have been immeasurably greater had this disaster struck on any workday. Fireman’s Fund liability in the four square block area surrounding the site of the explosion was $1,464,899 for fire and extended coverage on buildings and contents. In the year which has elapsed since the loss, Fireman’s Fund has paid out approximately $130,000 with a loss on the Insurance Exchange Building and some small losses still pending. Entire outstanding liability will probably not exceed $9,500, so that Fireman’s Fund’ total liability as a result of the explosion may not exceed $140,000.

As a result of the explosion, approximately 275 claims were reported to the Cook County Loss Adjustment Bureau. Allowing for some small claims which might have been handled direct by the various companies, the total claims could number as high as 300. By the end of 1947, of the claims reported to the Bureau, 219 had been settled at a dollar volume of $750,899. The Bureau reports that the larger and more serious losses had not been adjusted by the end of the year, and it was indicated that the total of claims reported would approximate $1,500,000.

Viewing this disaster in retrospect, what are the insurance lessons to be learned?

1. Need for accurate valuations: The building which exploded had been sold just prior to the explosion. Due to a variety of circumstances the companies and assured had been unable to meet so that the policies could be written; as a result, insurance was on binder with an agency and had been placed on binder with several companies, including Fireman’s Fund. Immediately following the blast it was determined that the binder coverage considerably exceeded the building valuation.

2. Need for extended coverage: The need for full coverage under the ECE was illustrated graphically. All the buildings involved in the loss were of substantial construction, especially those of full fire-resistive construction. Prior to this loss, it appeared inconceivable that these buildings would be subject to such extremely high losses from the perils covered by the ECE. It was proved that no building is safe, for this corner was typical of thousands which may be found in any city in the country.

3. Need for rental value coverage: Directly adjacent to the building which exploded was a six-story with basement, fire-resistive structure, occupied by various mercantile concerns; it suffered severe explosion damage. Today, one year after the loss, despite all efforts to return the building to usable condition, it remains untenantable. What more drastic proof is necessary to show the need for rental value insurance, no matter what the construction or where the building is located?

4. Such losses are not remote possibilities: Less than a year later, on January 15, 1948 the four-story with basement, mill-constructed furniture sales and storage building at the southeast corner of LaSalle and Ontario streets — a little more than a mile from the scene of the first loss —exploded, damaging the building beyond repair and killing five people. These losses illustrate once more the need for full coverage against all possible perils, however remote these perils may appear to be.

[Fireman’s Fund Archives: 4-1-3-4-61, 0411]